PSPCL conceals profit in tariff petition to seek hike

The Punjab State Power Corporation Limited (PSPCL) has concealed nearly Rs 297-crore profit it earned in the last fiscal from the power regulator, which has to decide the tariff hike for 2014-15. The management has consistently taken a credit for converting PSPCL from a loss-making to profit-making entity.

The Punjab State Power Corporation Limited (PSPCL) has concealed nearly Rs 297-crore profit it earned in the last fiscal from the power regulator, which has to decide the tariff hike for 2014-15.

The management has consistently taken a credit for converting PSPCL from a loss-making to profit-making entity. However, the annual revenue requirement (ARR) submitted by it to the Punjab State Electricity Regulatory Commission (PSERC) on December 19, 2013, indicates that the annual loss of the corporation has risen consistently. The loss during 2012-13 was Rs 646 crore, rising to `783 crore during 2013-14 and is likely to go up to Rs 2,595 crore during 2014-15.

However, the real picture is that for 2012-13 the PSPCL has earned a profit of Rs 297 crore and it is anticipating a profit of `600 crore for the current fiscal by cutting the costs of power purchase, exercising austerity measures and bringing efficiency in the distribution system.

An officer on the condition of the anonymity said the interim audited report for 2012-13 has reached the PSPCL office, but it deliberately didn't mention it in the ARR petition. "If they put forth the figure that the PSPCL has earned profit for 2012-13, the PSPCL fears that the power regulator won't allow them a tariff hike. Thus they have presented unaudited figures of loss for 2012-13 to conceal the profit," said the official dealing with the ARR.

He added that the last meeting of the director, finance, has also indicated that the PSPCL will earn profit in current year also. "However, the officials have projected the loss of Rs 783 crore in the current fiscal in the petition to demand hike of 13% for next year," he said.

Badish K Jindal, president, Federation of Association of Small Industries of India, said either the PSPCL is befooling the power regulator or the two are hand-in-glove, as the power regulator always allows tariff hike without verifying the valid objections raised by industry and other stakeholders.

The ARR petition is eyewash as they didn't mention the profit in the petition to demand more tariff hike, he added. "If the PSPCL earns profit and the management gets political credit, why the customers should not get the benefit of it by way of low tariff or by freezing it for next year. The management must come clear over this," he said.

Despite of several attempts, the chief engineer (ARR) could not be contacted for a comment. However, an official said the actual breakup of audited figures would be submitted in soon during the day of hearing to fix the tariff.